Zumiez (ZUMZ) Falls on Weak Results and Lower Outlook, But Is the Selloff Overdone?

Zumiez (ZUMZ) Falls on Weak Results and Lower Outlook, But Is the Selloff Overdone?

Tue, September 15, 2026 at 7:32 PM GMT+3 3 min read

• ZUMZ -3.58%

On September 10, Zumiez Inc. (NASDAQ:ZUMZ) reported weaker-than-expected results for its second quarter ended August 1, 2026, with the results falling short of Wall Street estimates and sending the stock lower.

For the second quarter of fiscal 2026, Zumiez Inc. (NASDAQ:ZUMZ) reported net sales of $209 million, down 2.5% year-over-year. Comparable sales declined 2.1%, with the weakness mainly coming from the US. Canada, Europe, and Australia all had positive comparable sales growth for the quarter. The company said it saw strong sales growth across its international markets, but softer domestic sales and lower foot traffic weighed on overall results.

The company also posted a net loss of $2.7 million, or $0.17 per share, compared with a net loss of $1.0 million, or $0.06 per share, in the second quarter of fiscal 2025.

Third-Quarter Outlook Disappoints, But Is It All Bad?

Zumiez Inc. (NASDAQ:ZUMZ) introduced third-quarter guidance, which also failed to provide much relief as it came in below Wall Street expectations. For the three months ending October 31, 2026, the company expects net sales of $222 million to $226 million, while earnings per share are projected to range from $0.00 to $0.10.

More importantly, management also lowered its broader outlook, saying fiscal 2026 sales are now expected to decline by low single digits and operating margin to fall slightly, versus its previous expectation for 50 to 100 basis points of operating-margin expansion.

Despite the weaker operating performance, Zumiez Inc. (NASDAQ:ZUMZ) continues to maintain an impressive financial position. As of August 1, 2026, the company had $97.3 million in cash and marketable securities, no debt, and an unused $25 million credit facility. The company also continued to return capital to shareholders as it repurchased 1.2 million shares for a total cost of $23.2 million during the second quarter.

For its international business, Zumiez Inc. (NASDAQ:ZUMZ) said it is focusing on a premium pricing strategy aimed at expanding margins and improving profitability. However, in the US, the company is working on merchandise assortment changes and customer experience initiatives in an effort to improve performance.

What the Numbers Say

Hedge fund interest in the stock remained unchanged in the second quarter. According to Insider Monkey's database, 16 hedge funds held positions in Zumiez Inc. (NASDAQ:ZUMZ) in the second quarter of 2026, the same number as in the first quarter.

Meanwhile, short interest stood at 10.99% of the company's float as of August 31, indicating a notable level of bearish positioning in the stock.

The stock has faced significant pressure this year, declining nearly 45% year-to-date as of September 14. Zumiez Inc. (NASDAQ:ZUMZ) currently trades at $14.38, close to its 52-week low of $13.64 and well below its 52-week high of $31.70. At this price, the shares trade at a forward P/E of 9.83.

Zumiez Inc.'s (NASDAQ:ZUMZ) low valuation and debt-free balance sheet provide some positive support, but the latest results show that the US business remains the key weakness. Q3 guidance also points to continued pressure. With the stock already down sharply and trading near its 52-week low, investors may want to wait and see whether the company's US initiatives can stabilize sales before treating the lower valuation as a stronger buying signal. For now, weak U.S. sales and lower guidance make it too early to conclude that the selloff has gone too far.

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